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Big questions following the Globe's non-sale


 

Some things to ponder in the wake of today's news that the New York Times Co. won't be selling the Boston Globe after all (Herald story here, Globe story here, entire memo to follow):

1. Given the speed with which the Times Co. decided to reject the bids assembled by Steve Taylor and Platinum, it seems--at least from the outside--like not a lot of deliberation was required. When did the Times Co. make up its mind not to sell? And what was the determing factor? 

2. The elimination of lifetime job guarantees earlier this year paved the way for some serious attrition--but that attrition hasn't materialized yet. When will the Times Co. start cutting, and how deep will the cuts be?

3. When Arthur Sulzberger and Janet Robinson spoke a few weeks ago of the Globe's progress toward profitability, some people thought it was just a ruse aimed at driving up the price. Today's announcement suggests it was more than that. But you've got to wonder: if the paper's improving financials stall, or slip backward, might a sale again become a possibility? And if that happens, might the Times Co.'s decision here scare prospective purchasers away?

4. At least in the Globe newsroom, staffers seemed inclined to forgive the Times Co. for its relatively recent threat to close down the paper. Still, the fact remains: the Times Co. threatened to close down the paper. How much ill will is still in the air over at Morrissey Boulevard, and what kind of problems might it pose in the future?

5. The answer to the previous question could depend on how Times Co. management handles recent employee requests to up healthcare contributions and prevent the implementation of a draconian new employee healthcare plan. Those requests have included the assertion that management provided bad info re: healthcare earlier this year--and that, if that info had been accurate, the Times Co.'s concession requests might have been rejected. How will management respond?  

It's possible that Robinson will address some of these points in tomorrow's "town-hall meeting" with Globe employees--but I wouldn't expect any definitive answers.

-------

Note from Arthur and Janet to all Boston Globe and Boston.com employees

After careful consideration and analysis, we wish to tell you that we have
terminated the process to explore the sale of The Boston Globe, Boston.com
and related businesses, and they will remain within The New York Times
Company.

We continue to assess strategic alternatives for the Worcester Telegram &
Gazette, and are determined to reach a conclusion there quickly.  We will
provide a full update to our colleagues in Worcester as quickly as
possible.

We know this has been a long and painful process, and we deeply appreciate
the focus and dedication that you have all displayed over the past several
months.  Janet will be visiting Boston tomorrow for an employee town hall
meeting at 11 a.m.  She will talk with employees and take your questions.
The Globe has significantly improved its financial footing by following the
strategic plan it set out at the beginning of this year.  All along, we
explicitly recognized that a careful restructuring of the Globe was one
possible route and, thanks to your hard work, that is precisely what has
been done.

The comprehensive financial strategy you executed incorporated a series of
measures to increase revenues and lower costs, including:

Consolidating printing facilities, expected to save $18 million a
year,

Increasing prices on newsstand and home-delivered copies of the
Globe,

Reducing compensation for the Globe's managers and other nonunion
employees,

Restructuring the Globe’s labor contracts, which we are projecting
will save $20 million in annual operating costs.

The great things you have accomplished both on the financial side and the
editorial side of the Globe and Boston.com have solidified their positions
as the leading media vehicles in the region.  With these strategic steps,
the Globe is on track to achieve substantial savings and is on a path to a
more secure financial future.

For these initiatives to be successful it was necessary for the Globe’s
readers, Boston.com’s users and the greater New England community to
continue to embrace our products.  They have responded with unwavering
support of the Globe, its offerings and you.

We want to take this opportunity to express our gratitude to you for your
many significant accomplishments under difficult circumstances.  We applaud
you for all that you have done and look forward to charting our future
together.

Arthur & Janet

 

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